Through an intervention from a geographical perspective on organizational space, this article aims to offer a new horizon in understanding international business strategy.
Starts with two interrelated questions: does space exist in organizations and how does an organization manipulate and produce this organizational space in order to gain competitive advantage? By tackling these questions in the context of international business activities, this paper engages existing (international) management theories.
This article critically reviews the narrow focus of most international business theories on physical location and distance as a significant determinant of foreign direct investment and diverse activities of transnational corporations (TNCs). Quantitative empirical studies in this genre tend to emphasize physical space as a mere “container” of different locations of TNC activities and to measure the distance between these locations as an independent variable in statistical models. Drawing upon recent theoretical developments in economic geography, the paper develops a relational perspective on business organizations. In such an organization space, there are no fixed locations manifesting themselves in physically measurable forms. Instead, locations and distances in an organizational space are relational and thus discursively constructed through actor‐specific strategies and practice. The paper argues that one key strategic goal of business organizations is to continuously expand its organizational space (viz. physical space) and to economize on this spatial expansion.
Reveals the need for a critical reexamination of existing management and organization theories to take account of how space and boundaries may influence the strategy, structure, and performance of business organizations.
Examines the properties of organizational space and applies the proposed concept to the case of TNCs.
